United States Credit
The United States Credit Administration (USCA), more commonly known as United States Credit, is a United States federal program established during the that offers a line of credit to all eligible U.S. citizens. The program was established by the Credit For Americans Act of 1935, signed by President Franklin D. Roosevelt. As part of the New Deal, President Roosevelt supported the idea of state-issued credit lines to US citizens. The program was aimed at impoverished Americans who wished to establish a credit history while avoiding exorbitant interest rates and at those to whom creditors were reluctant to loan to. Originally administered as an independent agency, it has been run by the U.S. Treasury since 1950 which formulates all the program's rules and regulations. Since its foundation, it has loaned over $1.3 trillion to over 140 million Americans. 24% of Americans in 2017 said they hold a USCA Card. The program's success has been a matter of debate, with some praising it for achieving its intended goal in providing credit for the poor while others criticizing it as an improper use of taxpayer money. It is the third largest federal expenditure, totaling $450 billion in fiscal year 2016. The USCA headquarters is located at the Phillip J. Westmore Building in Alexandria, Virginia. History The idea of government-issued lines of credit had not been attempted in any country prior to 1935. Such a proposal was first put forward in the United States by Congressman Terrance Winters who argued that accessible credit was an essential means of proving worthiness for citizens wishing to turn their financial lives around. State credit was introduced into President Roosevelt's New Deal plan in 1935 and was formulated in the Credit For Americans Act. Credit For Americans Act The Credit for American Act (CFAA) established the Credit Administration originally as an independent agency. Within the bill was an immediate budget of $2 billion, about 35% was to be loaned to eligible applicants. Benefits How it works The Credit Administration functions by offering lines of credit to low-income citizens and to citizens with poor credit scores. First, an application must be submitted which asks a prospective borrower various questions relating to their financial state. To qualify, one must be employed at the time of filing the application or, if unemployed, was previously employed within the last six months. The applicant also must not owe more than $1,200 in outstanding debt, either by credit card or by loan. Applicants with a credit score of 450 or higher do not qualify. If approved, the US government then buys the outstanding debt from the lender company and reduces the interest rate. A card, embossed with the applicant's name, is then issued and can be used to make purchases. By law, all vendors which sell food products must accept USCA Cards. Some products may not be purchased with a USCA Card, including tobacco, alcohol, firearms, and certain luxury goods. The limit on each card varies by the outstanding debt the applicant already owes and their credit history. Every 30 days, a statement is sent to the card holder listing their expenses which must be paid back in full every 60 days. A minimum amount, which is determined as 10% of the outstanding balance, must be paid within 30 days. If the full statement is not paid back within 60 days, a 7.3% interest rate is then applied every month the balance is left outstanding. Cards The cards are manufactured by various private contractors, depending on the state where they're issued. They look and function as a privately-issued card with the name of the cardholder and the expiration date (which is three years after issuing) embossed in sliver lettering. Operations